Credit scores and Lenders

Lenders for Manufactured/Mobile home financing don’t use automated tools to analyze your credit report like traditional mortgage lenders. Manufactured home lenders look at these reports manually and with their own subjective guidelines.

Just what are they looking for in this analysis? Well certainly the first go/no go test is the overall credit score. These lenders look at the Equifax score only, both a good and bad thing. Equifax tends to have the most trade lines reported so a good score is easier to obtain. Generally, scores between 640 and 800 are considered “A” paper rates and give the buyer the most options, and with all lenders the higher the score the lower the interest rate.

The second thing lenders review is the depth of credit history. Just how much experience does the buyer have with managing debt and paying off loans. Someone who has 3-5 active trade lines (credit cards, installment loans, etc.) and who has at least a 3-year history of making payments on time is going to be considered a better risk than someone who only has 1 trade line with a 1 year history, regardless of what the score indicates. In fact, we have seen 750 range credit score borrowers turned down due to lack of history. As the loan size requested gets larger the lender wants to see more history of repaying larger loans like auto loans over a period of time.

What are the big cautions underwriters look for? The obvious one is a history of missing payments, if someone missed one or two payments 2-5 years ago, that’s not a serious concern, but if that borrower has a history of missing payments regularly, that may be cause for a turn down.

The other major factor to consider is any application for bankruptcy or foreclosure. Some find bankruptcy an immediate cause for denial, others allow a discharged bankruptcy if it has aged 3-5 years.

For a true pre-approval have an experienced broker or underwriter review your credit history.